ILPA responds to rival guidelines

The Institutional Limited Partners Association (ILPA) has provided its own take on the differences between its reporting standards and those recently released by the International Private Equity and Venture Capital Valuation (IPEV) board.

In a set of documents recently posted to its website the LP trade group said its guidelines require “more in-depth information from GPs and [provide] investors with greater transparency”. However, ILPA said its standards were simply a guide for fund managers and do not conflict with other reporting standards. 

Earlier this month IPEV unveiled its draft guidelines, which unlike ILPA’s standards, do no offer specific templates around capital call and distribution notices. IPEV argues the content presented to investors should be consistent but that the format used should be driven by individual discussions between GPs and their investors so that specific fund characteristics are taken into account. 

In response ILPA has said its notice templates are designed to streamline reporting through a common standard document used by GPs. “Not only is information presented in a standard way for ease of communication between parties and simplicity in locating required information, it acts as a bridge to the possibility of electronic data sharing at some point in the not-so-distant future,” ILPA said.

On the transparency front, ILPA said its guidelines incorporate more firm-level data, as opposed to just fund-level, in its quarterly reporting format. ILPA also argued that IPEV’s segregation of “Essential Disclosures” from “Additional Disclosures” will lead to multiple data requests by some investors seeking a high level of transparency. 

For its part IPEV argues its guidelines provide more clarity around compliance. ILPA said a clear compliance test with its guidelines was part of its Best Practices framework, but that it “does not enforce ‘compliance’ with each and every item in its Best Practices”. 

Other differences between the two guidelines were less philosophical and more technical in nature. IPEV said its standards do not repeat information investors can find in financial statements and further suggests fund managers calculate fair value using IPEV valuation guidelines. ILPA said it largely supports the same, excluding the mention of any specific set of valuation guidelines GPs should adhere to.